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My 20 year old son decided after a year of college that it wasn’t the right fit for him, and decided to pursue a trade instead. He is working as an apprentice for a commercial plumbing company, and loving it to the point he is thinking of business opportunities in the future.
This has lead him to start taking steps into “adulting.” He has expressed interest in establishing a credit history to allow for future things like home purchasing, loans, etc. Last year, I opened credit card accounts for all of my kids under my AMEX account, as this was suggested as a way for them to build credit. Unfortunately, he was recently declined a store credit card because his credit score was “zero” (he applied for the card so he could receive the discount associated with it, and thought it would also allow him to build credit).
Any suggestions on how someone his age can begin to build his credit history?
I would have suggested adding him to your cards. Try a different company. I have done this with VISA and Master Card years ago and it worked.
Try and get a gas credit card and a store (yes try a different store).
The last suggestion would be a prepaid card. Maybe open a savings account at a credit union and apply to them for a cc.
The major credit card co's will give you a free report. Get the reports and see if there is any bad info on it. I lived in a number of cities my daughter lived in but not me.
Some credit companies are accepting utility payments in calculating the credit score but I assume he does not have these. If he does I think you have to ask the reporting company to include these. Maybe a fellow posted can add some info.
My son recently turned 18 and we had previously added him to our BoA credit cards. He's had a bank account account with BoA for years and he just applied for a credit card and they gave him one. He's a senior though and I think his credit limit is high because he asked me if I could spend $1000 on his card so that he can get the $200 reward within the first 90 days. Of course, I'll have to repay him the money I spend.
I suspect he has quite a bit of $$$ in his account because he also does stocks and thus the ease in getting a credit card. Or may be it's because he's already a BoA customer.
I got credit by getting a bank of America credit card. Terrible company, but they were the only one who would give me a card. After a year I got a better card.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Have the CC sons name and TIN. You may be the second named owner (joint or cosigner). But really he is old enough. $1000 limit, charge no more than 30% of capacity of credit limit. Auto pay. Every so often leave a small balance to carry into the next month.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,161 posts, read 7,675,883 times
Reputation: 9957
I use BoA-Amtrak, Chase-Amazon Prime, and CreditUnion credit cards. All are no fee enrollment, no annual fee, Amazon Prime is of course a fee service but has a 5% cash back.
I hope you're also stressing the importance of paying off the balance on the card each and every money if / when he does get it. That is more important that establishing credit. There are a lot of people who spend their whole lives, even those with good incomes, making payments on things. That's the most important lesson you can give your son.
I recommend you have him follow Dave Ramsey (ok, he's not my favorite, but his 7 Baby Steps financial blueprint is very clear cut and easy to follow).
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Any suggestions on how someone his age can begin to build his credit history?
Thanks in advance![/QUOTE]
Get a single gas station credit card. He will probably get a $200 credit limit to start. Charge one tank of gas every month and pay it off the day the bill comes. After 6 months or a year get another gas station credit card and repeat.
My 20 year old son decided after a year of college..
There are credit cards available to college students. The only minimum requirements were being at least 18 years old and having a savings/checking account. This are pretty easy to get.
I had one when I was back in college. I think the original limit started at $300-500. As long as you paid off the balance each month you were good. They would slowly increase your limit. After about a year with that card I was able to get another card much easier.
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